Hiring our first HR professional (Toughest HR Question)

Knowing when to establish an HR function at your organization
By Brian Kreissl
|Canadian HR Reporter|Last Updated: 09/10/2012

Question: We’re a relatively small but growing organization. Up until now, all of our HR tasks have been handled by our financial controller. But she is starting to feel a bit overwhelmed and, frankly, a little out of her depth. How do we know when it’s time to hire our first real HR professional? What kind of skills should we look for in such a person?

Answer: The short answer is if there is enough work to keep a qualified HR professional busy on a full-time basis, then it’s probably time to consider hiring at least one HR generalist (sometimes referred to as an “HR soloist” when there is only one HR person at an organization).

However, if money is tight and the organization can still make do with a controller or office manager handling most HR-related tasks — with other work such as recruitment and basic recordkeeping being handled by line managers — then the organization might be able to make do without hiring an HR professional just yet.

If your controller is feeling the pinch, she may be able to obtain some temporary help at crucial times or retain an HR consulting firm, an outsourcing provider (for work such as payroll, benefits administration and reference checks) or an employment lawyer, and it may be possible to hold off on hiring a full-time HR practitioner.

Another possibility is to hire someone on a part-time basis. But if the organization is growing steadily, you probably should consider hiring an HR person sooner rather than later.

No hard and fast rules

There are no hard and fast rules around when an organization needs to think about setting up a formal HR function or hiring its first HR practitioner.

While I haven’t seen too many organizations with fewer than 100 employees with a full-time HR person, it isn’t unheard of to see a company smaller than that with at least one dedicated HR resource. This is probably an application of the old rule of thumb that says organizations should have roughly one HR practitioner for every 100 employees.

However, that ratio is a bit dated and dependent on a number of variables, including the industry in question, the company’s resources, the complexity of the employment offering, the degree of sophistication of the employees, how well-equipped the managers are, whether the workforce is union or non-union, the employee relations climate, whether any HR-related tasks have been outsourced and the geographic dispersion of the organization.

It’s also worth considering how important the people side of the business is to the organization, whether the organization, ultimately, wants to view HR strategically and whether it wishes to position itself as an employer of choice.

The way responsibilities are allocated is also important. For example, a lot of retail organizations have a very low HR-to-staff ratio because store managers typically handle a lot of HR-related activities.

Candidate profile for HR ‘soloist’

If your company is starting to feel major growing pains and the controller feels a bit out of her depth, it’s likely time to start thinking about hiring at least one person to manage the human resources function.

Such a person should ideally have a strong background as an HR generalist and be experienced and well-versed in just about all aspects of human resources management. A strong intermediate-level person who wants to run her own show might be a good person for the job. If your company is going to continue growing steadily and you foresee the profile of the HR function increasing at the organization in the relatively near future, consider hiring someone bright and ambitious who can grow along with the HR function and the organization in general.

At a minimum, it is probably best to give the person the title of HR manager. Otherwise, the person may be bullied by more senior managers at the organization and lack authority to drive change and introduce much-needed HR programs.

Ideally, as the size and scope of the HR function increases, the person can be promoted to the role of director or even vice-president, or someone more senior could be brought on board to manage the HR function if the person you hire isn’t quite up to the challenge.

If the organization is still quite small, it is probably alright to have the HR manager report to the financial controller or CFO for now. However, you should be aware that companies that view HR strategically generally have the HR function headed by a vice-president who reports directly to the CEO.

Brian Kreissl is the managing editor of Consult Carswell. He can be reached at brian.kreissl@thomsonreuters.com. For more information, visit www.consultcarswell.com.

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